VZCZCXRO0412
PP RUEHLMC
DE RUEHDR #1483/01 3111433
ZNR UUUUU ZZH
P 071433Z NOV 07
FM AMEMBASSY DAR ES SALAAM
TO RUEATRS/DEPT OF TREASURY WASHINGTON DC PRIORITY
RUEHC/SECSTATE WASHDC PRIORITY 7020
INFO RUCPDOC/DEPT OF COMMERCE WASHDC PRIORITY
RUEHLMC/MCC WASHINGTON DC PRIORITY

UNCLAS SECTION 01 OF 04 DAR ES SALAAM 001483 
 
SIPDIS 
 
SENSITIVE 
SIPDIS 
 
DEPT AF/E FOR MBEYZEROV 
TREASURY FOR V BRANDON, J RALYEA, A SAEED 
MCC FOR K FICKENSCHER, M KAVANAGH 
COMMERCE FOR B ERKUL 
 
E.O. 12958: N/A 
TAGS: OVIP PREL PGOV EAID ECON TZ
SUBJECT: SCENESETTER FOR SECRETARY PAULSON'S NOVEMBER 2007 
VISIT TO TANZANIA 
 
Summary 
------- 
¶1.  (SBU) The U.S.-Tanzanian bilateral relationship has 
witnessed a sea change over the past two years.  With the 
election of a charismatic, pro-Western President, and 
increasing levels of U.S. assistance, cooperation has 
expanded in areas ranging from health and education to 
counterterrorism and military affairs.  As a nascent 
democracy with an impressive record of peaceful political 
transition, Tanzania is an anchor of stability in a turbulent 
region.  Despite daunting challenges -- HIV/AIDS, poor 
infrastructure, corruption, and political stalemate in 
Zanzibar -- the Government of Tanzania (GOT) is clearly 
committed to furthering both economic development and 
democracy.  Providing more than USD 392 million in direct 
assistance to the GOT, the Mission aims to advance several 
strategic priorities such as enhancing Tanzania's 
counterterrorism capability and strengthening the checks and 
balances of Tanzania's democracy.  In early 2008, we will 
sign a USD 698 million MCC Compact; clouds are gathering, 
however, as one corruption case after another is aired in the 
press, without decisive action by President Kikwete.  Major 
donors have threatened to reduce "medium term" assistance 
levels without greater transparency and accountability.  End 
Summary. 
 
Political and Economic Background 
--------------------------------- 
¶2.  (SBU) In 1992, Tanzania opened the door to multi-party 
democracy, transitioning from a single party, socialist 
state.  Under the stewardship of former President Mkapa, 
fundamental macro-reforms were introduced and Tanzania began 
its transition toward free-market capitalism.  With the 
landslide election of President Kikwete in 2005, Tanzania 
underwent its third peaceful transition to a new President. 
Taken together, political and economic reforms introduced 
since 1992 have made Tanzania an example of peace and 
stability in the region. 
 
¶3.  (SBU) Formidable challenges remain.  Located in a 
turbulent neighborhood, Tanzania has eight porous borders and 
a 1,500 kilometer coastline.  Infrastructure remains 
rudimentary, red tape and corruption impede private sector 
development, and HIV/AIDs prevalence hovers around seven 
percent.  While elections on the Mainland have been free and 
fair, Tanzania is still a state dominated by the executive 
branch and the ruling Chama Cha Mapinduzi (CCM) party.  In 
Zanzibar, serious irregularities and sporadic violence marred 
elections in 1995, 2000, and 2005. 
 
¶4.  (SBU) While Tanzania has achieved major macro-economic 
reform over the past decade, macro stability has yet to 
translate into significant gains at the micro level.  More 
than one third of Tanzanians live in abject poverty and per 
capita GDP is USD 340. In 2006, the Tanzanian government had 
to revise its growth forecasts downward (from 7.2 to 5.8 
percent) due to a food shortage and an ongoing power crisis. 
The lack of electricity, coupled with rising oil and food 
prices, caused inflation to increase from approximately 4 to 
7 percent.  Tanzania's oil import bill quadrupled and its 
business climate suffered set backs.  In 2007, with good 
rains and new leadership in the energy sector, economic 
forecasts suggest a growth rate of 6 to 7 percent is 
achievable. 
 
U.S.-Tanzanian Bilateral Relationship 
------------------------------------- 
¶5.  (SBU) With the election of President Kikwete in December 
2005, U.S.-Tanzanian bilateral relations have warmed 
significantly.  President Kikwete's pro-Western stance, 
coupled with an increasing level of U.S. assistance, has 
precipitated this change, enhancing cooperation in sectors 
ranging from health and education, to counterterrorism and 
military affairs.  President Kikwete has visited the U.S. 
three times since taking office, meeting President Bush in 
Washington D.C. (May 2006) and in New York (September 2006). 
In September 2007, President Kikwete attended the UN General 
Assembly in New York, met with Secretary of State Condoleezza 
Rice in Washington D.C., and attended a dinner in Washington 
D.C. hosted by the MCC CEO, Ambassador Danilovich. 
 
¶6.  (SBU) As a member of the UN Security Council (January 
2005-December 2006), Tanzania supported key resolutions 
sanctioning North Korea and Iran.  Tanzania did not fully 
 
DAR ES SAL 00001483  002 OF 004 
 
 
support the USG's effort to address Burma's human rights 
situation in the Security Council, insisting the issue be 
dealt with in the Human Rights Council instead.  With respect 
to country specific human rights resolutions in the Third 
Committee, Tanzania was also not completely cooperative and 
abstained from votes on several human rights resolutions 
which the GOT believed should be handled by the Human Rights 
Council. 
 
¶7.  (SBU) Tanzania has started to play an increasingly 
prominent role in the region on issues ranging from Sudan to 
Somalia.  Standing up to Sudan, the Kikwete administration 
was outspoken in its support of a UN peacekeeping mission to 
take over the African Union (AU) mission in Darfur and 
against Sudan assuming the AU Chairmanship.  President 
Kikwete has also pledged to send 1,000 peacekeeping troops to 
Darfur. With the recent outbreak of violence in Somalia, 
Tanzania has also been supportive.  Tanzania joined the 
Somalia Contact Group at the U.S.' behest and President 
Kikwete swiftly voiced his support for Ethiopia, the need for 
an African peacekeeping mission to be put in place, and 
offered to train 1,000 Somali troops to help stabilize the 
situation.  Tanzania has long played a constructive role in 
the Burundi peace process and recently, President Kikwete 
assumed a lead role within SADC on Zimbabwe. 
 
Strategic Priorities 
-------------------- 
¶8.  (SBU) The Mission's strategic priorities in Tanzania are: 
(i) building the GOT's counterterrorism (CT) capacity, with 
specific focus on establishing a national CT Center; (ii) 
improving health and education by combating HIV/AIDS and 
malaria, and increasing access to school for underserved 
children such as Muslim girls; (iii) strengthening Tanzania's 
nascent democracy and anti-corruption efforts; (iv) promoting 
regional stability by developing Tanzania's peacekeeping 
capability and deepening military-to-military ties; (v) 
spurring economic growth through policy reform and improved 
natural resource management; and (vi) influencing public 
opinion especially among Tanzania's Muslims who tend to view 
U.S. policy as anti-Islam. 
 
¶9.  (SBU) We support these strategic priorities with active 
diplomatic engagement and a generous foreign assistance 
program.  Although Tanzania enjoys the support of numerous 
donor countries, the U.S. is one of the top donors in 
Tanzania in dollar amounts.  In FY08, foreign assistance from 
USAID and State Department will reach approximately USD 38 
million, while total USG assistance will amount to USD 392 
million including presidential initiatives such as PEPFAR and 
PMI.  Taking into account the U.S. share of contributions 
from multilateral donors such as the World Bank and African 
Development Bank, U.S. assistance will total USD 648 million 
in 2008.  This does not include major private U.S. 
benefactors such as the Gates Foundation.  Other major 
bilateral donors include the U.K., Norway, Sweden, and the 
European Union. 
 
¶10.  (SBU) To ensure that corruption does not undermine 
development efforts, the Mission is sharply focused on 
supporting President Kikwete's anti-corruption campaign.  The 
Kikwete administration has taken several steps to combat 
corruption, appointing a new Director General of the 
Prevention and Combating of Corruption Bureau (PCCB) and 
passing two new pieces of legislation: the Anti-Money 
Laundering Bill and the Anti-Corruption Bill.  While pleased 
with passage of these bills, we are disappointed that the 
Anti-Corruption Bill does not adequately safeguard the 
independence of the PCCB.  We are also extremely troubled by 
the steady drum beat of corruption allegations featured in 
the press involving many of Tanzania's senior leaders.  Thus 
far, these senior leaders have not felt compelled to counter 
the allegations, nor have they been brought to justice for 
their alleged actions.  We and other donors increasingly 
question whether there is the political will in State House 
to tackle corruption at senior reaches of government. 
 
¶11.  (SBU) In the wake of the 1998 Embassy bombing, the 
Mission is actively engaged in furthering counterterrorism 
(CT) cooperation with the Tanzanian government.  The Mission 
has an integrated strategy involving modernization of 
Tanzania's law enforcement as well as winning the hearts and 
minds of the Tanzanian people.  Our work in Pemba -- a Muslim 
enclave along the Swahili coast -- exemplifies this strategy. 
 
DAR ES SAL 00001483  003 OF 004 
 
 
 We have knit together cultural preservation projects to 
repair mosques, self-help projects to improve rural 
livelihoods, and a multitude of small USAID projects 
including the donation of generators to provide electricity 
to two hospitals.  In addition, CDC is providing HIV 
prevention and treatment services at the central hospital in 
Pemba.  USAID and the Combined Joint Task Force-Horn of 
Africa (CJTF-HOA) have also partnered to build and furnish a 
primary school and the Mission has plans to inaugurate an 
American Corner to advance Islamic outreach efforts.  Another 
key component of the Mission's strategy is helping the 
government establish its own national, interagency CT Center 
to collect, share and analyze CT data. 
 
Zanzibar's "Political Problem" 
------------------------------ 
¶12.  (SBU) In his December 2005 inaugural address, President 
Kikwete pledged to address Zanzibar's "political problem," as 
many call it, which involves the bitter divide between the 
two political parties - CCM and the Civic United Front (CUF) 
- and between Zanzibar's two islands - Unguja and Pemba. Like 
the 1995 and 2000 elections, Zanzibar's 2005 elections were 
marred by irregularities.  A National Democratic Institute 
observer team reported "serious problems in Zanzibar's urban 
region where 40 percent of the registered voters reside." 
However, 2005 did register important administrative 
improvements and violence was contained. Nevertheless, the 
elections ended in an impasse: CCM claimed victory (53 
percent of the vote) and CUF contested the elections and 
refused to recognize President Karume's government. 
 
¶13.  (SBU) Throughout 2006, neither party made any formal 
reconciliation attempt.  Among CUF members, there appeared to 
be a divide between older members urging patience and time 
for President Kikwete to address the problem, and the CUF 
youth wing which was increasingly frustrated and impatient. 
Within CCM there also appeared to be a divide between more 
moderate members recognizing that06*'[ CSQ@Qoi]{YJJzQJQ%QQl reconciliation talks between the CCM 
Secretary General, Yusuf Makamba, and CUF's three time 
 
SIPDIS 
presidential candidate, Maalim Seif Sharif Hamad.  The 
negotiations are ongoing, although little progress has been 
made.  CUF leaders have stressed that their bottom line is 
the formation of a government of national unity in advance of 
the 2010 elections.  CCM, on the other hand, appears 
unwilling to implement a power sharing agreement prior to the 
2010 elections.  CUF leaders have repeatedly emphasized that 
without a government of national unity, the 2010 elections 
will be neither free nor fair and have repeatedly warned that 
their membership is becoming increasingly restless and 
disillusioned with the democratic process. 
 
Military-to-Military Relations 
------------------------------ 
¶15.  (SBU) Under the Kikwete administration, the GOT has 
expressed its intent to begin participating in international 
peacekeeping operations.  In 2006, Tanzania became our newest 
partner in the African Contingency Training and Assistance 
(ACOTA) program.  With Kikwete's offer to deploy a 
peacekeeping brigade to Darfur under UN auspices, the 
Mission's goal is to train three Tanzanian battalions by 
¶2009.  These battalions will not only contribute to UN 
deployments but constitute part of an AU regional standby 
brigade.  (Note: Demonstrating its intent to become more 
active in peacekeeping, Tanzania deployed 75 military police 
to Lebanon in January 2007 to help secure the UNAFIL mission, 
and as recently as October 2007 President Kikwete repeated 
his pledge to deploy a battalion of peacekeepers to Darfur.) 
 
¶16.  (SBU) The Tanzanian government has also signaled its 
desire to deepen military-to-military ties with the U.S. more 
broadly.  In December 2006, the GOT gave approval to CJTF-HOA 
to establish a Civil Affairs presence on the Swahili Coast. 
The Civil Affairs team has begun humanitarian projects and 
will help build civil military operations capacity within the 
Tanzania People's Defence Forces (TPDF).  Among some members 
of TPDF's old guard, however, there remains a residual 
resistance to developing deeper ties with the U.S. 
 
 
DAR ES SAL 00001483  004 OF 004 
 
 
¶17.  (SBU) The Tanzanian government has repeatedly requested 
military equipment from the U.S. but its failure to sign 
Article 98 is an impediment.  To respond to the GOT's 
requests for increased training opportunities, the Mission 
will use IMET funds to send promising officers from 
Tanzania's army and navy to the U.S. for educational exchange 
programs.  We also use funds from a State Department source 
(NADR-EXBS) to provide equipment to Tanzanian coastal 
security forces to strengthen the country's maritime security 
capacity.  Finally, using DoD Section 1206 funding, we 
provided nearly USD 1 million in FY07 to train Tanzania's 
military in Special Forces Operations with an emphasis on 
patrolling the country's borders. 
 
Health Challenges: HIV/AIDS and Malaria 
--------------------------------------- 
¶18.  (SBU) Tanzania faces a mature generalized HIV epidemic, 
with a prevalence rate of approximately 7 percent and 1.4 
million people living with HIV/AIDS.  In FY 2008, PEPFAR will 
provide Tanzania with over USD 303 million to support 
treatment, care, and prevention programs.  The PEPFAR program 
is on track to meet its final targets: 150,000 individuals on 
anti-retroviral drugs; care for 750,000 individuals, 
including orphans and vulnerable children; and prevention of 
490,000 new HIV infections.  Although the U.S. has fostered 
positive relationships with the Tanzanian government in the 
health sector, significant challenges remain including: poor 
health infrastructure; a shortage of health care workers; a 
weak procurement system; and occasional allegations of 
corruption. 
 
¶19.  (SBU) Malaria is the number one killer of children in 
Tanzania and continues to be a major cause of maternal 
mortality.  As a focus country under the President's Malaria 
Initiative (PMI), Tanzania will receive up to USD 31 million 
in FY08 to support the delivery of long-lasting, insecticide 
treated bed-nets, indoor residual insecticide spraying, and 
the use of Artemisinin-based Combined Therapy (ACT) as 
treatment.  Since 2006, USAID has focused its efforts in 
Zanzibar, significantly reducing malaria cases, and will 
expand its campaign to the Mainland with the goal of reducing 
malaria deaths by 50 percent by 2010. 
 
Millennium Challenge Corporation (MCC) 
-------------------------------------- 
¶20.  (SBU) In September 2007, the MCC Board approved Tanzania 
for the largest MCC Compact to date, USD 698 million.  The 
Compact will strengthen Tanzania's infrastructure network in 
three key areas: roads, water, and energy.  Tanzania's 
Compact is now on track for signature and funding in January 
¶2008.  However, with the rising tide of corruption 
allegations leveled at the government, our message has been 
that a Compact is an agreement of reciprocal 
responsibilities, and to sustain it over five years, Tanzania 
must pay heed to its corruption index and inject greater 
transparency and accountability into governance. 
 
¶21.  (SBU) Tanzania also received MCC Threshold funds - USD 
11.2 million from FY05-07 .  The Threshold program, which is 
aimed at good governance and anti-corruption projects, 
consists of four components: (i) public procurement reform; 
(ii) a rule of law initiative with focus on the Prevention of 
Corruption Bureau; (iii) civil society strengthening; and 
(iv) technical assistance to establish a Financial 
Intelligence Unit. 
 
Comment 
------- 
¶22.  (SBU) Secretary Paulson's visit comes at a time when the 
U.S. is providing unprecedented support to Tanzania and when 
there is a great deal of positive momentum in the 
U.S.-Tanzanian bilateral relationship.  While his visit, 
therefore, will accentuate the positive, we will also ask him 
to underline the critical importance of transparency and 
accountability in government.  Tanzania is poised for the 
largest MCC Compact ever, at the very moment donors have 
begun to question its commitment to clean government.  More 
broadly, Tanzania today is a model of stability, enjoying 
peaceful transitions of power and promising economic growth. 
It is in U.S. interests to strengthen and sustain this model 
for the continent.  A rising tide of unchecked corruption 
puts it all at risk. 
GREEN